Commerce One's offering, a combination of software and service, aims to cut the expensive paperwork associated with routine purchases for both buyers and suppliers.
"What this is really saying is that MCI has chosen Commerce One for its secure electronic commerce solution, particularly on the procurement, business-to-business side," said Chuck Donchess, Commerce One's vice president of marketing and business development.
Commerce One's system customizes catalogs, listing only negotiated prices and items approved for purchase by the buyer's procurement department. After a user selects a product, the system automates online purchases. CommerceOne collects $2.50 per sale. The MCI deal means suppliers can host a purchasing server, linked to their back-end systems, at MCI rather than on their own premises.
Commerce One, headed by Sybase cofounder and exchairman Mark Hoffman, also signed up MCI Systemhouse, MCI's systems integration operation, to deliver and sell Commerce One's interbusiness purchasing system. Systems integrators Ernst & Young Technologies, Cambridge Technology Partners, and BSG Alliance/IT also have signed on.
The business-to-business procurement space is getting crowded. Other players on the software side include Ariba Technologies, Open Market, Fisher Technology Group, and Actra, a joint venture of Netscape Communications, and GE Information Systems.
The MCI alliance potentially could become even bigger. The deal hasn't closed yet, but MCI shareholders have approved merging with British Telecom to produce a multinational telephony giant to be called Concert. The combination could add BT's European consultants to the MCI force selling Commerce One.
Commerce One's system doesn't come cheap. Buying organizations pay $400,000 to $4 million to set up the system, and the rate is about $750,000 for a company with 500 to 750 users and about 500 suppliers. Commerce One also charges each supplier about $3,000 for set-up plus $2.50 per sale.